Board of Commissioners’ role in the Indonesian Limited Liability Company

According to Article 1 paragraph 6 Law No. 40 Year 2007 Regarding Limited Liability Company (Company Law), Board of Commissioner is Company organ with the task of general and/or specific supervision in accordance with the articles of association and giving advice to the Board of Directors. Yet, Commissioner individually has no significant authority in supervising Board of Directors. Commissioners would have the significant authority if they are collective that is known as Board of Commissioners.

The role owned by Board of Commissioners is to supervise the daily tasks or acts of Board of Directors or director. Board of Commissioners are responsible for the company supervision as governed under Article 108 Paragraph 1 stating, “Board of Commissioners shall supervise management policies, the running of management in general with regard to both the Company and the Company’s business, and give advice to the Board of Directors.”

Further, Article 108 Paragraph 2 Company Law states, the supervision and giving of advice as stated under Paragraph 1 shall be conducted for the company’s interest and in accordance with the Company’s purpose and objectives. Besides, Board of Commissioners also must make the minutes of Board of Commissioners’ meeting and keep the copies thereof.

There is a interesting thing related to the role of Board of Commissioners, for in a certain time and condition, Board of Commissioners could perform management actions that was supposed to be done by the Director or Board of Directors. This matter is governed under Article 118 Company Law stating that, “Pursuant to the article sof association or a GMS resolution, a Board of Commissioners may perform action of management of a Company in specified situation for a specified period”.

The certain condition for example, if there was a case before the court between Company and all members of Board of Directors that surely have conflict of interest with the Company, in such a case, Board of Commissioners would be entitled to represent the Company. Or in the event of all members of Board of Directors were absent or had been suspended, then Board of Commissioners would be the party who had authority to undertake the management of and represent the Company.

In consequence, all rights, authority and obligation of Board of Directors towards Company would apply to Board of Commissioners performing that management role.

Besides, Article 121 states, in running the supervision as mentioned under Article 108 Company Law, Board of Commissioners could form committee which its member consists of one or more is a member of Board of Commissioners. And the Committee is responsible to the Board of Commissioners. (this Article in Bahasa)

Legal Basis:

Law No. 40 Year 2007 regarding Limited Liability Company

Board of Commissioners’ role in the Indonesian Limited Liability Company

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Boris Tampubolon, S.H. is an Advocate and Legal Consultant. He is also the Founder of Law Firm Dalimunthe & Tampubolon Lawyers. He made this website with the aim to provide all information related of law, help people regards to law matters, and give free consultation.